Specialty drugs – the costly medications used to treat complex disease like cancer and Hepatitis C – have become a hot-button topic given the fact that healthcare spending is perpetually on the rise.
After a five-year contraction in healthcare spending growth, medical costs are projected to climb another 6.8 percent in 2015, according to the Health Research Institute at PricewaterhouseCoopers. The high cost of specialty drugs is the main culprit here – these drugs account for 70 percent of all medication approvals by the FDA, the report said, with many more in the pipeline.
That said – and brace yourself here – only 4 percent of patients use specialty drugs, though they account for a whopping 25 percent of total U.S. drug spending, PWC said. But it’s not all doom and gloom, according to the Medical Cost Trend: Behind the Numbers report. Here’s why:
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However, over the long-term, these innovative new therapies may improve quality of life and reduce other medical costs. From an insurance perspective, the immediate cost spike should level off as patients are cured. Additionally, offsetting the spike in specialty drugs is about $17 billion less in spending as big-name branded drugs lose patent protection in 2015.
PWC put together a snazzy set of infographics illustrating the economics of specialty drugs. They’re certainly worth eyeballing:
